Ascendas REIT has proposed to acquire a portfolio of seven logistics properties in Chicago for US$99 million ($133.2 million), says the REIT manager on May 10.
All seven properties are located on freehold land with a total net lettable area (NLA) of 132,344 sqm. They are located across six infill industrial submarkets across Chicago, Illinois, in the US.
The properties will be acquired from third-party vendors, BREIT Industrial HS Property Owner LLC, BREIT Industrial Canyon IL1M03 LLC, BCORE Jupiter NEMW 1 LLC and Icon Pac Owner Pool 4 Northeast/Midwest, LLC.
The acquisition is said to be accretive to Ascendas REIT’s distribution per unit (DPU). If the proposed acquisition was completed on Jan 1, 2021, the REIT’s DPU would have improved by 0.001 cent or 0.01%.
The estimated net property income (NPI) yield for the first year post-acquisition is around 5.3% and 5.1% pre-transaction costs and post-transaction costs respectively.
“Following our successful entry into the USA logistics market in November 2021, we are pleased to acquire another portfolio comprising seven logistics properties in Chicago, the largest industrial market in the country based on existing space,” says William Tay, executive director and CEO of the manager.
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“This portfolio comes with a long weighted average lease expiry (WALE) of five years and is 100% occupied by 12 tenants from a diverse range of industries including logistics service providers, engineering companies and a food distributor,” Tay adds.
According to the REIT manager, the proposed acquisition will increase and diversify its exposure to logistics properties in the US and across its portfolio.
On a pro forma basis, the proportion of Ascendas REIT’s logistics properties in the US will increase to 14.6% from 9.4%. On a total portfolio basis, the proportion of the REIT’s logistics properties will rise to 25%.
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Chicago has the largest logistics property market in USA based on existing inventory size of about 116.5 million sqm. It is supported by a superior combination of transportation modes and infrastructure.
The proposed acquisition will be funded through internal resources and/or existing debt facilities.
Units in Ascendas REIT closed 2 cents lower or 0.71% down at $2.79 on May 9.
